$USO Where Is Oil Going From Here?

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With $USO breaking out higher like I thought it would, where is the top?  Where does this rally stop?

I wrote about the looming $USO spike here:   http://www.optionmillionaires.com/2013/uso-oil-spike-coming/

The calls I highlighted there are up over 300%.

I think this rally has two possible points of interest to the upside and I think it will, in all likelihood, not get past the first.  $USO at higher prices is not good for the consumer, it is not good for the economy, and with rates rising, I can't see oil going much further to the upside without severe consequences for the economy.

 

Here are two charts I put together.  The first chart is from earlier this week and illustrates where I saw $USO headed short term.  The next chart represents where I see support and resistance going forward.   The dotted line is where I expect the rally for $USO to stop and the solid line is where $USO will head if all the stars align perfectly.

A war in the Middle East will spur panic buying.  When that subsides $USO will be below where it trades today.  But for now it offers a great opportunity.

 

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Profile photo of uranium-pinto-beansKnown to most as Uranium Pinto Beans, Jason has more than 15 years under his belt of trading stocks, options and currencies. His expertise primarily lies in chart analysis, and he has a strong eye for undervalued stock. Because he’s got the ability to identify great risk/reward trades he usually enjoys taking the path less traveled and reaping the benefits from the adventure.

He is a co-founder of Option Millionaires, and he is best known for his weekly webinars with Scott, as well as his high level training webinars and charts found in the forums.

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